2nd Quarter Results

Ford Motor Co 20 July 2004 Contact: Investment Shareholder Media Information Media Community: Inquiries: Center: Becky Bach Raj Modi 1.800.555.5259 or 1.800.665.1515 or 1.313.594.4410 1.313.323.821 1.313.845.8540 1.313.621.0504 bbach1@ford.com fordir@ford.com stockinfo@ford.com media@ford.com FORD ANNOUNCES SECOND QUARTER FINANCIAL RESULTS - Net income of 57 cents per share, or $1.2 billion. - Earnings from continuing operations of 61 cents per share, excluding special items. - Financial Services sector pre-tax profit of $1.6 billion, up $800 million from a year ago. - Ford Europe pre-tax profit of $211 million, an improvement of more than $700 million compared with the second quarter 2003. - Full-year earnings guidance increased by 15 cents to a range of $1.80 to $1.90 per share from continuing operations, excluding special items. DEARBORN, Mich., July 20 - Ford Motor Company (NYSE: F) today reported net income of 57 cents per share, or $1.2 billion, for the second quarter of 2004. This compares with net income of 22 cents per share, or $417 million, in the second quarter of 2003. Ford's second-quarter earnings from continuing operations, excluding special items, were 61 cents per share, or $1.3 billion. This result exceeds the First Call consensus estimate of 50 cents per share. Ford's total sales and revenue in the second quarter rose to $42.8 billion from $40.6 billion in the year-ago period. 'I am pleased that we continue to make solid progress in this extremely competitive environment,' said Bill Ford, chairman and chief executive officer. 'Although the remainder of the year includes many challenges, we'll generate lots of excitement with the introduction of new products such as the Ford Five Hundred, Freestyle and Escape Hybrid, the Land Rover Discovery/LR3 and the new Ford Focus in Europe.' Additional product introductions for the rest of the year include Ford F-Series Super Duty, GT and Mustang as well as Mercury Mariner and Montego. AUTOMOTIVE SECTOR On a pre-tax basis, Ford's worldwide automotive sector reported a loss of $57 million during the second quarter of 2004. Excluding special items of $140 million, worldwide automotive profit in the second quarter was $83 million, an $80 million improvement over the same period a year ago. The special items included a $120 million charge in North America related to the restructuring and revaluation of our investment in Ballard Power Systems (Nasdaq: BLDP; TSX: BLD), a leading fuel cell manufacturer, and $20 million for the completion of restructuring in Ford Europe. Worldwide automotive sales for the second quarter rose to $36.7 billion from $34.1 billion in the same period last year. Worldwide vehicle-unit sales in the quarter were 1,748,000, up from 1,718,000 a year ago. Automotive cash, marketable securities, loaned securities and short-term Voluntary Employee Beneficiary Association (VEBA) assets on June 30, 2004 were $26.8 billion, up from $26.5 billion at the end of the first quarter. THE AMERICAS For the second quarter, the Americas reported a pre-tax profit of $477 million, excluding special items, up $101 million from the same period a year ago. North America: Ford's North America automotive pre-tax profit for the second quarter was $455 million, excluding special items, up $10 million from a year ago. The increase primarily reflected improved vehicle mix and favorable net pricing, partially offset by lower volumes and the non-recurrence of favorable 2003 warranty reserve adjustments. Sales were $20.5 billion, down from $20.7 billion in the same period a year ago. South America: Ford's South America operations reported a second-quarter pre-tax profit of $22 million, a $91 million improvement from the 2003 second quarter. The improvement primarily reflected favorable pricing and higher vehicle volumes, partially offset by higher material costs. Sales improved to $665 million from $435 million in the same period a year ago. FORD EUROPE AND PREMIER AUTOMOTIVE GROUP (PAG) The 2004 second-quarter combined pre-tax loss for Ford Europe and PAG was $151 million, excluding special items, compared with a loss of $359 million for the year-ago period, a year-over-year improvement of $208 million. Ford Europe: Ford Europe's second-quarter pre-tax profit was $211 million, excluding special items, compared with a pre-tax loss of $525 million during the 2003 period. The improvement of more than $700 million primarily reflected higher volumes and lower costs. Ford Europe's sales in the second quarter were $6.7 billion, compared with $5.2 billion during the second quarter of 2003. Premier Automotive Group: PAG reported a pre-tax loss of $362 million for the second quarter, compared with a pre-tax profit of $166 million for the second quarter of 2003. The decline in results primarily reflected unfavorable exchange rates, higher costs including the effects of product changeovers, unfavorable mix and lower net pricing. Second-quarter sales for PAG were $6.9 billion, compared with $6.4 billion a year ago. FORD ASIA-PACIFIC, AFRICA, MAZDA AND ASSOCIATED OPERATIONS The 2004 second-quarter combined pre-tax profit for Ford Asia-Pacific, Africa, Mazda and Associated Operations was $55 million, compared with $17 million for the year-ago period, a year-over-year improvement of $38 million. Ford Asia-Pacific and Africa: For the second quarter of 2004, Ford Asia-Pacific and Africa reported a combined pre-tax loss of $5 million, an improvement of $23 million from the same period a year ago. The improvement primarily reflected favorable exchange rates and stronger volume and mix, partially offset by higher costs and unfavorable net pricing. Sales rose to $1.9 billion, compared with $1.4 billion during the second quarter of 2003. Mazda and Associated Operations: During the second quarter of 2004, Ford's share of Mazda and Associated Operations was a combined pre-tax profit of $60 million, compared with $45 million a year ago. FORD CREDIT Ford Motor Credit Company reported record net income of $897 million in the second quarter of 2004, up $496 million from $401 million a year earlier. On a pre-tax basis from continuing operations, Ford Credit earned $1.4 billion in the second quarter, compared with $661 million in the previous year. The increase in earnings primarily reflected continued improved credit loss performance, higher used vehicle prices and the favorable impact of the low interest rate environment. HERTZ Hertz reported a pre-tax profit of $144 million in the second quarter compared with a $57 million profit during the same period a year ago. The improvement primarily reflected higher rental car volume in leisure and commercial segments, higher profit from the disposal of used vehicles and equipment sales, and favorable cost performance. The improvements were partially offset by lower pricing in highly competitive car rental markets worldwide. OUTLOOK 'When you look at our second-quarter results you see continued strong performance in Financial Services and significant progress at Ford Europe, where actions we took last year have begun to pay off,' said Chief Financial Officer Don Leclair. 'Looking forward, we remain dedicated to achieving our financial milestones in this competitive marketplace and continuing to improve our balance sheet.' For the third quarter of 2004, Ford expects to earn in a range of breakeven to 5 cents per share from continuing operations, excluding special items. Ford is increasing its full-year earnings guidance by 15 cents per share to a range of $1.80 to $1.90 per share from continuing operations, excluding special items. The increase primarily reflects the strong performance of the company's Financial Services sector. Special items, which are presently estimated to reduce full-year earnings by 8 cents per share, are expected to consist primarily of the restructuring and revaluation of our Ballard investment and completed European restructuring actions. Investors and media can hear a review of second quarter results by Don Leclair via conference call at 800-599-9795 (617-786-2905 for international dial-in) with a verbal passcode of 'Ford Earnings Call' or on the Internet at http://www.shareholder.ford.com. Supporting presentation material will be available at the same Internet address. The presentation will begin at 9:00 a.m. EDT, July 20. Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures and distributes automobiles in 200 markets across six continents. With more than 327,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Credit, Quality Care and Hertz. Statements included herein may constitute 'forward looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation: • greater price competition resulting from currency fluctuations, industry overcapacity or other factors; • a significant decline in industry sales, particularly in the U.S. or Europe, resulting from slowing economic growth, geo-political events or other factors; • lower-than-anticipated market acceptance of new or existing products; • work stoppages at key Ford or supplier facilities or other interruptions of supplies; • the discovery of defects in vehicles resulting in delays in new model launches, recall campaigns or increased warranty costs; • increased safety, emissions, fuel economy or other regulation resulting in higher costs and/or sales restrictions; • unusual or significant litigation or governmental investigations arising out of alleged defects in our products or otherwise; • worse-than-assumed economic and demographic experience for our post- retirement benefit plans (e.g., investment returns, interest rates, health care cost trends, benefit improvements); • currency or commodity price fluctuations; • changes in interest rates; • a market shift from truck sales in the U.S.; • economic difficulties in any significant market; • reduced availability of or higher prices for fuel; • labor or other constraints on our ability to restructure our business; • a change in our requirements under long-term supply arrangements under which we are obligated to purchase minimum quantities or pay minimum amounts; • credit rating downgrades; • inability to access debt or securitization markets around the world at competitive rates or in sufficient amounts; • higher-than-expected credit losses; • lower-than-anticipated residual values for leased vehicles; • increased price competition in the rental car industry and/or a general decline in business or leisure travel due to terrorist attacks, acts of war, epidemic diseases or measures taken by governments in response thereto that negatively affect the travel industry; and • our inability to implement the Revitalization Plan. Ford Motor Company and Subsidiaries SECTOR STATEMENT OF INCOME For the Periods Ended June 30, 2004 and 2003 (in millions, except per share amounts) Second Quarter First Half 2004 2003 2004 2003 (unaudited) (unaudited) AUTOMOTIVE Sales $36,719 $34,142 $75,563 $68,301 Costs and expenses Cost of sales 33,834 31,660 67,905 62,715 Selling, administrative and other expenses 2,842 2,456 5,590 4,754 Total costs and expenses 36,676 34,116 73,495 67,469 Operating income/(loss) 43 26 2,068 832 Interest income 128 134 245 282 Interest expense 312 229 704 542 Net interest income/(expense) (184) (95) (459) (260) Equity in net income/(loss) of affiliated companies 84 72 140 93 Income/(loss) before income taxes - Automotive (57) 3 1,749 665 FINANCIAL SERVICES Revenues 6,083 6,440 11,930 13,096 Costs and expenses Interest expense 1,422 1,598 2,872 3,242 Depreciation 1,661 2,255 3,392 4,808 Operating and other expenses 1,259 1,193 2,471 2,381 Provision for credit and insurance losses 182 679 553 1,272 Total costs and expenses 4,524 5,725 9,288 11,703 Income/(loss) before income taxes - Financial Services 1,559 715 2,642 1,393 TOTAL COMPANY Income/(loss) before income taxes 1,502 718 4,391 2,058 Provision for/(benefit from) income taxes 268 194 1,097 531 Income/(loss) before minority interests 1,234 524 3,294 1,527 Minority interests in net income/(loss) of subsidiaries 72 98 157 200 Income/(loss) from continuing operations 1,162 426 3,137 1,327 Income/(loss) from discontinued/held-for-sale operations 3 (9) (20) (14) Net income/(loss) $1,165 $417 $3,117 $1,313 Average number of shares of Common and Class B Stock outstanding 1,831 1,832 1,832 1,832 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK Basic income/(loss) Income/(loss) from continuing operations $0.64 $0.23 $1.72 $0.72 Income/(loss) from discontinued/held-for-sale operations -- -- (0.01) -- Net income/(loss) $0.64 $0.23 $1.71 $0.72 Diluted income/(loss) Income/(loss) from continuing operations $0.57 $0.22 $1.52 $0.67 Income/(loss) from discontinued/held-for-sale operations -- -- (0.01) -- Net income/(loss) $0.57 $0.22 $1.51 $0.67 Cash dividends $0.10 $0.10 $0.20 $0.20 Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME For the Periods Ended June 30, 2004 and 2003 (in millions, except per share amounts) Second Quarter First Half 2004 2003 2004 2003 (unaudited) (unaudited) Sales and revenues Automotive sales $36,719 $34,142 $75,563 $68,301 Financial Services revenue 6,083 6,440 11,930 13,096 Total sales and revenues 42,802 40,582 87,493 81,397 Automotive interest income 128 134 245 282 Costs and expenses Cost of sales 33,834 31,660 67,905 62,715 Selling, administrative and other expenses 5,762 5,904 11,453 11,943 Interest expense 1,734 1,827 3,576 3,784 Provision for credit and insurance losses 182 679 553 1,272 Total costs and expenses 41,512 40,070 83,487 79,714 Automotive equity in net income/(loss) of affiliated companies 84 72 140 93 Income/(loss) before income taxes 1,502 718 4,391 2,058 Provision for/(benefit from) income taxes 268 194 1,097 531 Income/(loss) before minority interests 1,234 524 3,294 1,527 Minority interests in net income/(loss) of subsidiaries 72 98 157 200 Income/(loss) from continuing operations 1,162 426 3,137 1,327 Income/(loss) from discontinued/held-for-sale operations 3 (9) (20) (14) Net income/(loss) $1,165 $417 $3,117 $1,313 Average number of shares of Common and Class B Stock outstanding 1,831 1,832 1,832 1,832 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK Basic income/(loss) Income/(loss) from continuing operations $0.64 $0.23 $1.72 $0.72 Income/(loss) from discontinued/held-for-sale operations -- -- (0.01) -- Net income/(loss) $0.64 $0.23 $1.71 $0.72 Diluted income/(loss) Income/(loss) from continuing operations $0.57 $0.22 $1.52 $0.67 Income/(loss) from discontinued/held-for-sale operations -- -- (0.01) -- Net income/(loss) $0.57 $0.22 $1.51 $0.67 Cash dividends $0.10 $0.10 $0.20 $0.20 Ford Motor Company and Subsidiaries SECTOR BALANCE SHEET (in millions) June 30, December 31, 2004 2003 (unaudited) ASSETS Automotive Cash and cash equivalents $5,937 $5,427 Marketable securities 11,537 10,749 Loaned securities 5,317 5,667 Total cash, marketable and loaned securities 22,791 21,843 Receivables, net 3,016 2,721 Inventories 10,614 9,181 Deferred income taxes 3,083 3,225 Other current assets 8,166 6,839 Total current assets 47,670 43,809 Equity in net assets of affiliated companies 1,897 1,930 Net property 40,680 41,993 Deferred income taxes 10,640 12,092 Goodwill and other intangible assets 6,187 6,254 Assets of discontinued/held-for-sale operations 2 68 Other assets 15,417 14,495 Total Automotive assets 122,493 120,641 Financial Services Cash and cash equivalents 9,711 16,343 Investments in securities 1,156 1,123 Finance receivables, net 108,459 110,893 Net investment in operating leases 32,412 31,859 Retained interest in sold receivables 16,396 13,017 Goodwill and other intangible assets 999 1,008 Assets of discontinued/held-for-sale operations 385 388 Other assets 12,067 17,292 Receivable from Automotive 3,016 3,356 Total Financial Services assets 184,601 195,279 Total assets $307,094 $315,920 LIABILITIES AND STOCKHOLDERS' EQUITY Automotive Trade payables $15,947 $15,289 Other payables 3,547 2,942 Accrued liabilities 35,415 32,171 Debt payable within one year 760 1,806 Current payable to Financial Services 598 124 Total current liabilities 56,267 52,332 Senior debt 12,987 13,832 Subordinated debt 5,155 5,155 Total long-term debt 18,142 18,987 Other liabilities 43,184 45,104 Deferred income taxes 1,652 2,352 Liabilities of discontinued/held-for-sale operations 21 94 Payable to Financial Services 2,418 3,232 Total Automotive liabilities 121,684 122,101 Financial Services Payables 2,385 2,189 Debt 149,199 159,011 Deferred income taxes 11,010 11,061 Other liabilities and deferred income 8,379 9,211 Liabilities of discontinued/held-for-sale operations 91 37 Total Financial Services liabilities 171,064 181,509 Minority interests 785 659 Stockholders' equity Capital stock Common Stock, par value $0.01 per share (1,837 million shares issued) 18 18 Class B Stock, par value $0.01 per share (71 million shares issued) 1 1 Capital in excess of par value of stock 5,341 5,374 Accumulated other comprehensive income/(loss) (1,209) (414) Treasury stock (1,761) (1,749) Earnings retained for use in business 11,171 8,421 Total stockholders' equity 13,561 11,651 Total liabilities and stockholders' equity $307,094 $315,920 Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET (in millions) June 30, December 31, 2004 2003 (unaudited) ASSETS Cash and cash equivalents $15,648 $21,770 Marketable securities 12,693 11,872 Loaned securities 5,317 5,667 Receivables, net 3,016 2,721 Finance receivables, net 108,459 110,893 Net investment in operating leases 32,412 31,859 Retained interest in sold receivables 16,396 13,017 Inventories 10,614 9,181 Equity in net assets of affiliated companies 2,867 2,959 Net property 42,325 43,598 Deferred income taxes 3,242 7,389 Goodwill and other intangible assets 7,186 7,262 Assets of discontinued/held-for-sale operations 387 456 Other assets 33,051 35,950 Total assets $293,613 $304,594 LIABILITIES AND STOCKHOLDERS' EQUITY Payables $21,879 $20,420 Accrued liabilities 32,773 29,591 Debt 168,101 179,804 Other liabilities and deferred income 51,566 53,899 Deferred income taxes 4,836 8,439 Liabilities of discontinued/ held-for-sale operations 112 131 Total liabilities 279,267 292,284 Minority interests 785 659 Stockholders' equity Capital stock Common Stock, par value $0.01 per share (1,837 million shares issued) 18 18 Class B Stock, par value $0.01 per share (71 million shares issued) 1 1 Capital in excess of par value of stock 5,341 5,374 Accumulated other comprehensive income/(loss) (1,209) (414) Treasury stock (1,761) (1,749) Earnings retained for use in business 11,171 8,421 Total stockholders' equity 13,561 11,651 Total liabilities and stockholders' equity $293,613 $304,594 Ford Motor Company and Subsidiaries CONDENSED SECTOR STATEMENT OF CASH FLOWS For the Periods Ended June 30, 2004 and 2003 (in millions) First Half 2004 First Half 2003 Financial Financial Automotive Services Automotive Services (unaudited) (unaudited) Cash and cash equivalents at January 1 $5,427 $16,343 $5,157 $7,064 Cash flows from operating activities before securities trading 3,592 9,850 5,741 8,403 Net sales/(purchases) of trading securities (392) (31) 10 (380) Net cash flows from operating activities 3,200 9,819 5,751 8,023 Cash flows from investing activities Capital expenditures (2,601) (189) (3,415) (118) Acquisitions of receivables and lease investments -- (33,037) -- (28,920) Collections of receivables and lease investments -- 23,156 -- 18,800 Net acquisitions of daily rental vehicles -- (2,902) -- (1,545) Purchases of securities (5,593) (433) (4,255) (319) Sales and maturities of securities 5,312 391 2,093 376 Proceeds from sales of receivables and lease investments -- 5,370 -- 13,573 Proceeds from sale of businesses 125 -- 77 204 Repayment of debt from discontinued operations -- -- -- 1,421 Net investing activity with Financial Services 1,832 -- 1,867 -- Cash paid for acquisitions (30) -- -- -- Other 17 50 489 (38) Net cash (used in)/provided by investing activities (938) (7,594) (3,144) 3,434 Cash flows from financing activities Cash dividends (366) -- (366) -- Net sales/(purchases) of Common Stock (101) -- (3) -- Changes in short-term debt (267) 8,679 (113) (2,340) Proceeds from issuance of other debt 289 7,542 825 7,720 Principal payments on other debt (1,729) (22,672) (548) (12,395) Net financing activity with Automotive -- (1,832) -- (1,867) Other (15) 8 (5) 48 Net cash (used in)/provided by financing activities (2,189) (8,275) (210) (8,834) Effect of exchange rate changes on cash (37) (108) 175 240 Net transactions with Automotive/Financial Services 474 (474) (267) 267 Net increase/(decrease) in cash and cash equivalents 510 (6,632) 2,305 3,130 Cash and cash equivalents at June 30 $5,937 $9,711 $7,462 $10,194 Ford Motor Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the Periods Ended June 30, 2004 and 2003 (in millions) First Half 2004 2003 (unaudited) Cash and cash equivalents at January 1 $21,770 $12,221 Cash flows from operating activities before securities trading 13,442 14,144 Net sales/(purchases) of trading securities (423) (370) Net cash flows from operating activities 13,019 13,774 Cash flows from investing activities Capital expenditures (2,790) (3,533) Acquisitions of receivables and lease investments (33,037) (28,920) Collections of receivables and lease investments 23,156 18,800 Net acquisitions of daily rental vehicles (2,902) (1,545) Purchases of securities (6,026) (4,574) Sales and maturities of securities 5,703 2,469 Proceeds from sales of receivables and lease investments 5,370 13,573 Proceeds from sale of businesses 125 281 Repayment of debt from discontinued operations -- 1,421 Cash paid for acquisitions (30) -- Other 67 451 Net cash (used in)/provided by investing activities (10,364) (1,577) Cash flows from financing activities Cash dividends (366) (366) Net sales/(purchases) of Common Stock (101) (3) Changes in short-term debt 8,412 (2,453) Proceeds from issuance of other debt 7,831 8,545 Principal payments on other debt (24,401) (12,943) Other (7) 43 Net cash (used in)/provided by financing activities (8,632) (7,177) Effect of exchange rate changes on cash (145) 415 Net increase/(decrease) in cash and cash equivalents (6,122) 5,435 Cash and cash equivalents at June 30 $15,648 $17,656 This information is provided by RNS The company news service from the London Stock Exchange
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